It takes quite a bit of courage, determination and resilience to abandon the security of salaried employment and strike out as an entrepreneur. To be fair, most people do it in stages, nurturing their fledgling businesses while holding down their day jobs and working all hours of the day and night to get the new enterprise on a firm financial footing. Even then, though they’re technically profitable, small businesses are far more vulnerable to cash flow problems than their big corporate counterparts.
Let’s illustrate the kind of predicament that smaller business owners can find themselves in during this “just-after-Christmas” time of year. Take Monya, for example. She gave up her day job as a junior HR professional five years ago to devote herself to setting up a wellness consultancy. It was a long journey in the making, involving part-time courses in the evening and on weekends to train as a wellness professional.
Like many entrepreneurs, Monya wanted a nicer life for herself and her children. Five years on, business is good. However, she’s now faced with a dilemma: she needs to grow her business to keep up with demand and provide a service for additional clients. She and her husband have recently switched mortgage suppliers, and in the post-Christmas period, money is tight on all fronts, including family accounts, credit cards and business accounts.
Having recently been offered a lucrative contract to work with employees of an enlightened local business (a relatively large employer in her town), Monya foresees extra funds in the pipeline, but she needs to expand her premises to fulfil the contract properly. Her trusted builder estimates that she’s going to need £30,000 to complete the extension work, which in itself is straightforward and can be done fairly rapidly when work commences.
Feeling at a loss, Monya seriously considers turning the contract down. If she decides to come to peer-to-peer lender platform Unbolted, however, her cash flow shortage can well be averted. Like many small business owners with short-term cash flow problems, she is actually sitting on (or rather, in) the cash she needs. It’s just that Monya's asset isn’t in the form of cash – rather, she owns an opulent solid copper bath tub, five feet long and two-and-a-half feet wide, complete with a fluted hand-held shower unit. This near work of art was created by craftsmen at the world-renowned Les Metalliers Champenois, based in Rheims, France. These same artisans restored the torch on the Statue of Liberty in the 1980s.
A wedding present from a wealthy uncle, the bath is estimated to be worth £46,000 if auctioned on a secondary market – more than enough to act as collateral for a secured asset loan from p2p lender Unbolted. Unbolted’s specialist partners, all established and experienced auctioneers with expert knowledge of their fields, determine an asset’s value, and borrowing needs are met within hours of the piece arriving at the platform’s London HQ.
Borrowers can repay early without penalty. If the loan can’t be settled, the asset is sold at auction, and any excess over the agreed sum is returned to the owner. With cash locked up in valuable assets, small business owners don’t have to face Monya’s false choice – to grow or stand still.
